Interim Evaluation¹

Background. PRODECOP was approved by the Executive Board of the International Fund for Agricultural Development (IFAD) in September 1996 (Loan 427-VE). The loan entered into effect in June 1998 with an estimated implementation period of six years. The total cost of PRODECOP was estimated at USD 24.4 million, of which IFAD was to finance USD 12.0 million, the Government of Venezuela (GoV) USD 8.7 million, the co-financing institution 2.8 million and the beneficiaries USD 744,000. The cooperating institution is the Andean Development Corporation (CAF). The implementing agency is the Foundation for Training and Applied Research in Agrarian Reform (CIARA), with oversight from the Rural Development Institute (INDER), which is part of the Ministry of Popular Economy (MINEP).

The interim evaluation mission visited the country between 16 May and 7 June 2005. Its terms of reference were to evaluate the project's operations, draw lessons learned applicable to the design of future projects, make recommendations for implementation during the remaining life of the IFAD loan and analyse the advisability of formulating and carrying out a second phase of the project under evaluation. The mission held working meetings in Caracas with authorities from the MINEP and from CIARA, the Ministry of Planning and Development and CAF. The mission made an extensive tour of the project area, covering seven Venezuelan states and visiting 20 municipalities. Interviews were conducted with State agricultural officials and with municipal authorities within the project area, as well as conversations with beneficiaries.

Brief project description: Concept, objectives, goals and components. The diagnostic assessment and project concept were based on the assumption that the major constraints to improving living conditions and production among the target group lay in the lack of community organization and the lack of access to sustainable rural financial services. Accordingly, the following measures were proposed: (i) a large-scale training effort focusing on promoting and establishing social and economic/productive organizations at the community level; (ii) close collaboration with the Agricultural Extension Programme (PREA) being implemented by CIARA with World Bank financing in the same areas as PRODECOP, to ensure technical assistance for agriculture; (iii) a Community Initiatives Fund (FIC) to finance community projects proposed by organizations; and (iv) an ambitious programme to set up rural savings and loan cooperatives (i.e. rural credit unions) to mobilize savings among the target group and empower beneficiaries in credit management, together with a complex rediscount and guarantee system to provide these financial units with access to commercial lines of credit. Organizing beneficiaries was assigned priority as the most significant activity, not only to empower other actions but also to achieve the objective of "ciudadanizar" ² rural populations to involve them in policy-setting on decentralization. Moreover, particular emphasis was placed on gender in all project activities, to ensure that women would participate directly. PRODECOP was designed to cover a vast geographical area that takes in eight states and 39 municipalities.

The overall project objective is "to improve the quality of life and economy for poor farming families and small-scale producers by better positioning them within local development processes, increasing their farming income and improving prevailing socioeconomic conditions". The project's specific objectives are to: (a) provide training and technical assistance for rural poor communities; (b) create and strengthen participation mechanisms among rural poor communities and municipal and state governments; (c) create and strengthen social, economic and financial local organizations; (d) improve family incomes; (e) support policies for decentralization and strengthening of municipal governments. The project's ultimate goal is to raise community self-awareness. In order to achieve these objectives, three components were planned: (1) Training for development and citizen participation: to build technical and social capacity among project beneficiaries and the technical team, as well as municipal and state officials, to enable them to play an active role in social and economic development; (2) Financial services and rural financial system with three main objectives: (i) to provide financial services in support of production; (ii) to organize sustainable community-based rural financial institutions to provide such services; (iii) to initiate and consolidate linkages between such rural financial institutions and the banking system and other financial institutions, through the establishment and operation of guarantee and rediscount funds; and (3) Monitoring and evaluation: the monitoring, evaluation and management unit to oversee implementation of the components was to be set up within the Project Executing Unit (PEU) at CIARA.

Project targets included 760 communities served, 334 civil associations organized and 476 multiple interest groups for the first component. For the second component, targets included 198 groups planning credit unions and 150 credit unions. Plans called for 19 003 rural families to benefit under the training component for citizen development and participation, 15 000 families under joint actions in technical assistance for production by the project with PREA, and 9 000 members of community savings and loan organizations (150 "mature" entities) under the financial services and rural financial system component. Among these, plans called for 8 000 women to benefit and for 250 municipal employees to be trained. The project's gender approach was defined on the basis of an affirmative action strategy. Accordingly, the gender focus cuts across all project actions. No estimates were included in the project design with respect to project returns or expected increases in beneficiary income, nor was a logical framework prepared.

Results obtained. The project has met the original targets for reaching users under the major components. The training component benefited at least 13 000 families or 15 542 persons (82% of the target), and the financial services component exceeded the target with 11 458 users (121% of the target of 9 500 users). The number of communities reached is slightly higher than planned (779 versus 760), and the number of organizations registered is significantly higher than the target (655 civil society organizations compared to the 334 projected). Credit unions established number 151 (compared to the target of 150). The mission concluded that, given conditions at start-up, the project design overestimated the possibility of consolidating these financial entities during the implementation period. According to available information, some 9 000 women have used the project services, exceeding the target. The project has made an important contribution to setting up, training and developing private providers of technical assistance in all areas concerned.

The targets set for beneficiaries of technical assistance programmes were not met, nor were those for training municipal officials. Project performance was virtually nil on targets for loans to credit unions and establishment of a guarantee fund. The mission reiterates that the project design overestimated the viability of reaching these goals, given conditions prevailing at start-up. Finally, the project targets and resources to be financed under the FIC were not met, although disbursements were made and many projects were funded.

Financial performance. From the point of view of financial performance, project disbursements by end-2004 stood at 56% of the total. By source of financing, the Government of Venezuela had disbursed 75% of its contribution, the CAF 100% of its loan and IFAD only 34.7% of its loan (with 40% projected for mid-2005). Virtually all training resources were disbursed; outlays for project management exceeded projections by 20%; and 11% more than planned was disbursed for monitoring and evaluation. The FIC disbursed only 32% of projected resources. Under the financial services component, only 20% of planned disbursements were made since the guarantee and rediscount funds did not materialize. Given that the proceeds of the IFAD loan were to go to these funds, this explains the low disbursement rate for the loan. On the other hand, beneficiary contributions were greater than expected.

Project performance and impact on poverty and sustainability. Relevance of objectives. The overall objective of the project was not only highly relevant at the time of design but continues to be relevant, perhaps even more so, at the present time. The far-reaching changes in the country's economy in the past three years have laid a better foundation for increased participation by rural poor communities in public spending decisions at the national and local levels. Similarly, the changes seen in the political and institutional setting in the past five years are much more favourable towards an increase in grassroots local participation and achieving substantial improvements in socioeconomic conditions for the poorest social strata. Effectiveness. A review of PRODECOP's impact shows that (cf. the PRODECOP effectiveness matrix in appendix 5) the project was highly to very highly effective in terms of impact on: (i) social capital and empowering the population for action; (ii) human capital relating to better information and training and greater access to primary education; (iii) physical community assets; (iv) financial assets and greater access to financial services; and (v) institutions (particularly financial), policies and regulatory frameworks. On the other hand, PRODECOP was not very effective in connection with: (i) productive physical assets of families; (ii) producer relations with markets; (iii) agricultural output and food security; and (iv) the environment and the community resource base. Finally, PRODECOP was moderately effective in: (i) increasing physical consumer assets of families; (ii) human capital relating to health conditions, access to drinking water and the workload of women and children; and (iii) reducing environmental risk. Efficiency. Based on an analysis of the broad range of coverage achieved by PRODECOP, and an acknowledgement that the original design objectives were incorrectly formulated, the project's overall efficiency can unquestionably be deemed satisfactory.

PRODECOP is a good illustration of the virtually unequivocal relationship between design and proper implementation of components and activities, as well as achieving the expected positive impact. The results achieved under the training component for citizen development and participation generated substantial impact on the ability of organized communities to manage and obtain much greater investments and services in basic and social infrastructure. This social capital formation in turn generated a very positive impact on physical community assets, human capital relating to education and training, and to an appreciable degree health, living conditions and work by women and children. Also, the excellent implementation of promotion, training, establishment, operation and support activities for rural credit unions generated a notable impact on the installed network of such institutions and on their sustainable and increasingly autonomous operations. This in turn gave rise to a marked impact on the creation of local financial institutions and on access to credit, with the resulting impact on increasing physical consumer assets in households, on food security and on the sustainability of many agricultural activities.

The PRODECOP experience also shows that deficiencies in the design and/or implementation of some components can lead to little or no positive impact being achieved. An inadequate design of agricultural technical assistance facilities (contingent, without sufficient assurances, upon assumed coordination with another project financed by another international agency), aggravated by deficiencies in implementation, led to no impact being achieved on agricultural productivity, technological innovation, and finally, family farming income. Moreover, the financial services component design regrettably allocated most of the IFAD loan proceeds to creating the proposed guarantee and rediscount funds. Although these were consistent in principle with setting up a rural financial system with connections to private commercial banking, they were clearly premature given the level of development of local financial institutions, and not viable for the existing institutional framework. These deficiencies were reflected in the fact that the component had virtually no impact on the magnitude of financing for technology investments and innovations in the agriculture sector, no impact on the physical productive assets of the beneficiary population, and consequently minimal impact on farming income for project beneficiaries.

Impact on poverty. PRODECOP has generated a series of effects on the rural communities directly involved in its implementation, as well as on other economic and social agents linked to these communities and/or the relevant institutions. The mission concludes that no adverse impact was detected on conditions of poverty for the population concerned. On the contrary, the project led to a generally positive impact on various aspects of living and production conditions for the users of its services.

Sustainability. PRODECOP has generated a number of changes and effects with an undeniably positive impact on the economic and social wellbeing of the population. The permanence of this positive impact is contingent upon a series of constraints and conditions for sustainability. The sustainability of impact on social capital and the population's empowerment to interact with the authorities is clear since these are virtually irreversible attributes. The rural credit unions are undoubtedly the most sustainable structures generated by PRODECOP. This is determined by the management and operating model governing these local financial institutions to the extent that they maintain their dimensions and modus operandi.

Overall project evaluation and findings. PRODECOP may be summed up as a project with satisfactory implementation. This should be understood as a positive judgment because the project obtained results and generated a significant beneficial impact for the rural poor despite deficiencies in design and a number of contextual obstacles. Moreover, PRODECOP has generated a sound and sustainable basis for maintaining and expanding a positive dynamic for rural development, a high level of community participation and an expansion in local financial institutions. The project should be considered to be a successful first step, yet to be concluded, in the necessary process to fully achieve the original objectives. The main conclusions are as follows:³

PRODECOP has achieved the most important major objective in qualitative terms: the "ciudadanización" of tens of thousands of rural poor. Through training and promotion activities by community organizations, the users have "recognized one another", "grouped together", "awakened" and learned to exercise their citizens' right to petition the authorities in an organized and articulate manner. This formation of "social capital" is the project's most significant accomplishment.

PRODECOP was designed with relevant objectives based on a diagnosis that correctly placed emphasis on the scarcity of social capital in rural areas and, in particular, the lack of rural financial services, as the main obstacles to comprehensive development of the country's rural poor communities. Paradoxically, the design of instruments to address these issues included both extremely well-founded proposals and others that were ill-advised and not viable. The latter have had an adverse impact on the conditions of production for beneficiaries and above all on the disbursement of IFAD loan proceeds. Most of the unused funds had been allocated in design to set up a complex system of rural financial services (including a guarantee fund and a rediscount fund) that is not considered to be viable given the country's historical, geographical and institutional conditions. Nor has PRODECOP taken actions having any substantial impact on the conditions of production for beneficiaries. The failure of working agreements with PREA to materialize —having been inadequately provided for in the design and without explicit coordination arrangements with the World Bank— led to virtually no activities being carried out in this respect.

PRODECOP has been implemented with great dynamism and increasing effectiveness and efficiency, covering vast geographical areas with heterogeneous and complex characteristics that have not always been sufficiently taken into account. Actions in the indigenous areas included and a large part of the Eastern Area ought to have been strengthened further to ensure achievements similar to those of other regions.

PRODECOP achieved significant coverage, with between 16 000 and 20 000 families having used its services, mainly training. This is a remarkable achievement given the starting point of virtually no services in support of the country's rural poor population.

PRODECOP has mobilized investments and services in basic and social infrastructure in an amount and of a quality well above original plans and estimates. A large number of projects in basic and social infrastructure and services have either been carried out or are in progress in many rural communities served by the project. These investments, financed with public funding at various levels, would not have reached the communities without PRODECOP's training and organization activities.

The PRODECOP rural credit unions are the most successful experience in rural microfinance in the country and probably in the Latin American region. Rescaling the objectives set in the project design for the financial services component on a more realistic basis during PRODECOP implementation enabled dozens of rural credit unions to be promoted and set up effectively and sustainably. Their greatest significance lies not so much in the amount of resources tapped (approximately USD 800 000 in 151 rural credit unions) or mobilized (lending for approximately USD 3 million), but rather that these resources actually represent the savings of the rural poor and are being managed and administered by them. The dynamics of growth and expansion among many of the rural credit unions has laid the groundwork for establishing more complex networks and incipient financial markets in the rural environment. Rural credit unions have transcended the financial sphere to become grass-roots social organizations that are much sounder and more sustainable than any other. The design adopted for these mechanisms is favouring the inclusion of the poorest in society, as well as gender equity.

PRODECOP showed that mobilizing savings and loans from the rural poor is a complex process that requires a much longer maturation period than assumed in project design. It also showed that rural credit unions face constraints on their growth and soundness because they tap savings on a scale and timing that may not be compatible with the investment financing that can bring about a structural transformation in current technologies. This experience indicates that the use of such mechanisms is an effective and efficient response to the need for savings in terms of transactions and safeguards, as well as the need for credit to meet short-term demand. This provides a background for criticism of the design of overly ambitious proposals that link these local institutions to commercial banks prematurely. PRODECOP generates a series of questions about the future of such instruments and the need to come up with mechanisms to complement investment financing.

PRODECOP adopted several innovations during implementation that improved upon the design and enabled the project to adapt to a changing context and realities not properly perceived during the formulation stage. However, neither PRODECOP nor IFAD took sufficient action during implementation to reformulate crucial aspects of design that had a significant impact on loan disbursements and an impact on agricultural production by the beneficiaries. A series of innovative training methods in citizen participation characterized implementation of the component from the outset. Subsequently, several approaches to activities in support of communities and organizations enabled the project to have a significant impact. Similarly, setting up and supporting rural credit unions was done using innovative methods and systems not provided for in the original design. However, the design defects mentioned under the financial services component ought to have been formally recognized much earlier by the GoV and communicated to the cooperating institution and IFAD. Moreover, the IFAD mid-term review mission (2002) ought to have recognized the design failings rather than continuing to insist on the original design. This would have made it possible to take steps to reallocate these funds to other project activities. Also, the limited use of the FIC, explained by years of budget constraints at the national level, reveals limitations in negotiations to obtain budget authority to carry out the project properly. Similarly, the failure of the proposed agreement with PREA was identified early on in project implementation. Nevertheless, appropriate steps were not taken to strengthen these aspects (e.g., by including agricultural extension workers in teams of field promoters in select areas). Only at the end of implementation, in 2003 and 2004, were some efforts made to address this objective, and they remained insufficient.

PRODECOP's actions in indigenous areas and with indigenous groups present a number of failings as well as some successes. The project design called for special treatment for indigenous areas that would take into account the cultural characteristics of Warao and Kariña populations. Although a differentiated approach was developed for each ethnic group, the treatment for indigenous areas was similar to that of the project areas as a whole. The mission observed that, with the exception of a CAF supervision report, very few people have visited the area either from the missions or the PEU. Constant turnover in promoters occurred throughout the life of the project. Nevertheless, the mission observed the enormous value placed by these populations on the project actions. This led to an appreciation of the importance of strengthening socio-community organizations and implementing social projects in this area.

The strengthening of mutual relations between PRODECOP and town halls and local governments remains a pending issue. Although contextual variables prevented these objectives from being fully achieved, this mandate should nevertheless be taken up again in future stages. The sustainability of citizen participation at the local level is fundamentally contingent upon these dimensions of local development.

The gender approach was adopted and implemented successfully by PRODECOP. PRODECOP developed strategies for innovative and creative action that fostered gender equity naturally. In this way, the successes of the rural credit unions' organizational design generated a significant feminine presence and leadership. Moreover, (a) affirmative action in hiring PEU staff empowered the project in terms of equity and inclusion; (b) including women in project decision-making led to improvements in the quality of life for the beneficiary population as a whole; (c) disaggregating information by sex was a way of allowing the project to add value to its intervention under a differentiated vision of effects and impact; (d) promoting active participation by women in financial organizations lent value to their productive work; (e) purchasing shares and accessing credit unions in their own names placed women in an equal position to men for decision-making on the organizations' administration and management; (f) women's participation in diagnostic assessments and community planning provided a more comprehensive view of problems and their possible solutions.

Performance by the PEU has been more than satisfactory. The project enjoyed continuity in management and among most professional and technical staff for close to six years. This continuity enabled activity lines, consistent approaches and continuous actions to be maintained to benefit the target group.

The training, selection, operation and supervision of social promoters hired through co-implementing enterprises is considered to be a highly effective management policy that has empowered the project's positive impact. Given the country's lack of prior experience, the success achieved demonstrates very effective human resources management by the PEU, as well as the existence of qualified personnel at the national and local levels who are highly qualified and whose potential was detected and developed thanks to the project.

Performance by partners was generally satisfactory. However, IFAD and the GoV did accept design deficiencies and failed to remedy them in a timely manner during implementation. The design errors that had the greatest impact on the project have to do with agricultural technical assistance and the design of the guarantee and rediscount system. These components were not properly reformulated, either during implementation or during the mid-term review mission (2002). The failures affected the level of disbursement of the IFAD loan and the achievement of greater positive impact on users.

Monitoring and evaluation functions performed unevenly, with some successes and a considerable number of failings. The M&E unit was responsible for producing dozens of quarterly progress reports, which are very complete and adequate for analysing each time period. Nevertheless, the reports were not consolidated, either for each year or on a cumulative basis, such that the project's overall progress on various aspects could be evaluated. No unique registration system was established for project users, leading to serious problems in identifying the number of users discriminated by type of service and avoiding duplication. The formulation of impact indicators, contracted out to a specialized enterprise, took a protracted period of time and an appreciable expense to produce inferior instruments. Much data and information was gathered in the field and from regional offices that was neither centralized nor centrally processed, impeding an overall appreciation of the project's impact. No baseline study was performed in a timely manner. An impact assessment on beneficiaries was conducted in 2003 on the basis of a well designed survey that does not however permit comparisons with the pre-project situation given the lack of a baseline study.

Main findings and lessons learned. Main findings and lessons learned from the PRODECOP experience can be summarized as follows:

• Investing in development and citizen participation generates significant impact on building social capital and has an immediate effect on socioeconomic demand by the organized population. Training in the rights and responsibilities of citizens and their application through participation in decision-making on development planning and public investment promotes more inclusive, more sustainable democratization processes: Rural poor communities demonstrate a high degree of sensitivity and responsiveness to the presence and action of adequately trained development agents. This sensitivity increases in direct correlation to the prior absence of the public sector in these localities, and generates demands that transcend the local environment. Using appropriate instruments to promote and organize communities leads to a rapid and intense process of formulating participatory diagnostic assessments, setting priorities in terms of needs and programming petition actions and following up on initiatives. This points up the need to make adequate provision for resources and mechanisms to address increased demand. Mobilizing relatively idle local and regional resources is an appropriate response, as demonstrated by PRODECOP, but when such resources are scarce or nonexistent the inclusion of specific funds to meet such demand is always a necessity, as in the case of the FIC under this project. Otherwise, expectations may be frustrated, leading to a highly adverse impact on rural development.
• It is important to promote and qualify local enterprises and train local professionals and technicians to provide training and technical assistance to rural poor communities. Encouraging the establishment and development of local professional and technical enterprises with a social awareness and the ability to support development processes broadens and qualifies the scope of social policy and allows for a better match between the population and the supply of state services and community development programmes and projects.
• Given highly innovative project design features and/or major changes in the environment, it is necessary to establish closer and more timely oversight mechanisms for all those involved, to allow for adjustments and reformulations and avoid the underuse of originally allocated resources: PRODECOP failed to use a good part of the resources originally allocated by the GoV and IFAD as a result of inapplicable design features. This fact was known to the PEU and, through the cooperating institution, to IFAD, but corrective measures were not taken in a timely manner. Had a system of controls and more fluid communication been established, a timely change in direction could have enabled these resources to be used, for a much greater positive impact on the target population.
• Projects with extensive geographical coverage including areas with major ecological, climatic, productive and cultural differences should build intervention modalities into their design that take such differences into account. The design of projects with such characteristics should not only recognize the differences but above all build in differential instruments, resources and time periods so as to contribute effectively to offsetting differences at start-up.
• Promoting rural financial services based on a rural microfinance approach and comprehensive training for communities generates important benefits that transcend the financial sphere. PRODECOP shows that creating dozens of rural credit unions met a correctly identified need in a rural financial market that lacked depth, competitiveness and equity. Both the project design and practice showed that a component focusing on local financial intermediation can effect major changes in the rural financial landscape. Secondly, the decentralized nature of the functions of intermediary entities and the technical assistance system is crucial to the success of these proposals. Thirdly, at this level of development, the credit unions' legal underpinnings and internal controls are sufficient to continue offering services to members and a limited number of third parties. Only when the credit unions reach a higher rung of the financial market will it be necessary to introduce general regulations to protect non-member savers. Finally, the success achieved came about through five observed trends:
• Synchronization : In all the rural credit unions created in the context of the project, a flow of resources has been systematized between low-income households with a supply of liquidity and others with a demand for liquidity. This flow takes place at positive real interest rates on both savings and loans. Symmetry of information and relations among participants have been crucial to this synchronization.

• Inclusion : The rural credit unions promoted by the project tend to respond to four forces opposing marginalization: (a) Men and women make up credit union membership in proportions of 55%-45%. (b) The younger generation accounts for approximately one quarter of users. (c) A multi-ethnic membership has been observed in several rural credit unions. (d) Available evidence suggests that rural credit unions tend to include both the poor and the less poor.
• Expansion : Growth patterns for rural credit unions are uneven and varied. Expansion takes place in parallel to the diversification of financial products, coordination among credit unions and access to external funding sources. In several cases, forms of cooperation have been observed that can be considered precursors to an eventual federation of credit unions.
   
• Contribution to the social fabric: Although credit unions are not organizational vehicles designed for social change, they can be observed to occupy a real space in seeking out local arrangements and social dialogue. The credit unions developed positively as platforms for gender equity and as interlocutors for municipal management.
   
• Ownership: Among the most positive features are an individual and collective sense of ownership and fulfilment on the part of rural credit union members. Feeling that one is a co-owner of an intermediary financial organization is a critical factor in the "ciudadanización" process and is likely to be irreversible.

If rural financial services remain circumscribed to small microfinance institutions, substantial demand for financing investments to transform the current technological profile of the rural poor will continue to be unmet. Designing adequate long-term financial systems to operate through local financial institutions remains a challenge. The relative immaturity of the credit unions is still apparent in the modest range of long-term financing services for productive units. Some consolidated rural credit unions are expected shortly to finance productive projects on a larger scale and for longer periods. The instruments proposed in the design (guarantee and rediscount funds) were neither timely nor appropriate. PRODECOP can orient, advise and expand the room for manoeuvre for the credit unions, but cannot force linkages with the banking sector. This does not mean that a higher volume of external financing would not have been welcome. Had the component been reformulated during the mid-term review (2002), a significant portion of the funding reserved for the rediscount and guarantee funds could have been allocated to an external financing fund. Such an adjustment in the PRODECOP architecture was sacrificed in the interests of a more ambitious and less achievable objective.  The changes made in Venezuela's rural financial landscape warrant shared reflection by the GoV and international agencies on how to build upon the rural credit union experience in the country. The credit unions have amply demonstrated that their model functions in the absence of an external incentive structure. The opportunity does not always present itself to expand, deepen and capitalize upon experience through another initiative to improve the performance of the rural financial market and foster linkages with other economic and social spheres. Nevertheless, such an opportunity would be well worth it.

Projects that include indigenous communities should have a strong cultural content, give priority to own technologies, traditional educational and health practices, and festive expressions invariably kept in the memories of elders. Project design and implementation should consider these aspects so that sufficient resources in terms of quantity and quality may be allocated to address specific cultural problems. Focusing action exclusively on combating material poverty when working with indigenous populations can reduce and/or mask the contribution by indigenous peoples to building more equitable societies living in harmony with ecosystems.

Following the gender approach effectively and sustainably requires not only that staff, co-implementing agencies and promoters are properly sensitized to gender but also that this be an integral part of planning field work, and of training materials and methodologies at all levels and the design of technical and advisory assistance provided to organizations. The work done by the project with co-implementing agencies, professionals, local technicians and promoters – both in raising awareness and training and in developing teaching materials and methodologies for the gender approach with rural populations– makes a contribution towards future interventions dealing with rural development themes generally.

Recommendations. These recommendations have been drawn up for the dual purpose of contributing to better project completion (December 2005 or the one or two year extension now being negotiated) and collaborating on the design of an eventual second phase.

Training for development and citizen participation component. It is recommended that: (i) Linkages between socio-community organizations and municipal and state bodies be deepened and made more dynamic. This implies developing training processes to support a future vision and medium-term planning; (ii) Training to build capacity among community organizations to participate in decision-making beyond the community or immediate interest group be strengthened; (iii) Resource allocation by the FIC (or other funding source) be implemented more dynamically and speedily to satisfy unmet demand for community and productive initiatives and projects still at the formulation and negotiation stage; (iv) Regional and area strategies be established for medium and long-term economic productive development geared to increasing incomes, with the economic productive organizations of greatest potential and interest; (v) The notion of co-financing be introduced for training and technical assistance services at the local level, on the part of organizations selected to ensure their sustainability following project completion.

Rural financial services and financial institutions component. Recommendations: (i) Gather and systematize the experiences of credit union participants to address the deficit in narrative documentation on creation and development of PRODECOP rural credit unions, representing the most important instance in the region; (ii) Promote the establishment of a modest database on rural credit unions for each state and municipality, to serve as a guide for any organization or agency that wishes to learn about and replicate the experience; (iii) Set up exchange and training opportunities for staff with national agencies specializing in advisory assistance and training for credit union executives. Topics such as arrears analysis and policy, application of differential interest rates, balancing portfolios with different financial income and expenses, interpretation of rates of return, creditworthiness and liquidity have not been addressed in support provided to credit unions and are critical to gain access to formal banking institutions; (iv) With respect to the development nature of the credit unions, they require guidance that will not impose outside criteria but interact with their own dynamic. Where feasible in terms of time and resources, PRODECOP may assist in drawing up more business plans than has hitherto been the case. In particular, a number of credit unions are preparing to grow in a coordinated manner (in the regions of the West). This may occur through trust operations among them or by means of a plan to create a federation of credit unions within asingle municipal territory. This calls for a multiyear strategy based on a consensus with individual credit unions and representative and competent leaders. Projects of this kind must be prepared for with an investment and institution-building plan. PRODECOP must prepare for this mandate, either under an extension or during an eventual second phase.

The gender approach. Recommendations: (i) Systematize the characteristics of the organizations promoted for their potential in terms of inclusion and adaptation to the needs and interests of men and women; (ii) Empower women's participation in economic productive organizations. It is not sufficient to carry out actions to raise women's awareness and self-esteem without also implementing affirmative action policies to foster economic ventures involving women.

Serving indigenous areas. It is recommended that: (i) Agreements and partnerships be entered into with research programmes and centres working on indigenous issues, in order to broaden the scope of project actions, strengthen and add value to interventions by technicians and promoters and foster an impact that will translate intervention on poverty into recovering and building culture; (ii) In planning work with the indigenous population, action on poverty be distinguished from action to value culture; (iii) Additional efforts be focused on recovering the cultural expressions of indigenous peoples which are central to promoting economic alternatives and improving living conditions.

Monitoring and evaluation component. It is recommended that: (i) A significant improvement be made, through new hiring and/or consulting services, in the quality of technical and centralized information processing resources in the PEU with respect to users, training events, extension activities, etc. (e.g. centralize a unique roster of beneficiaries), in order to gain a full and accurate view of the variables indicating actual project coverage throughout implementation. The aggregation and consolidation of relevant data (e.g. number of users, number of activities, number of initiatives) should be performed by periods relevant to the evaluation of results and impact (e.g. by year, cumulatively from the start-up date) rather than by implementation unit (e.g. by quarter). (ii) Steps be taken in regional offices and co-implementing agencies to reprocess information recorded in a decentralized manner in order to build up the M&E system as mentioned in the previous point; (iii) Resources be allocated to complete the systematization of experiences with rural credit unions, indigenous areas and other aspects mentioned in this report; (iv) An updated socioeconomic diagnostic assessment be prepared on the communities involved in PRODECOP, to serve as a baseline study for subsequent project phases.

Action at the governmental level: It is recommended that: (i) The GoV ensure the budgetary credits for use of the remaining IFAD loan proceeds, in the event an extension in the closing date is approved for Loan 427-VE, as well as local counterpart funding, in order to complete a series of pending activities; (ii) Continuity in PEU technical teams be assured until the project is complete, including the eventual transition to a second phase.

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1/  The Interim Evaluation Mission was composed of Mr Ruy de Villalobos (Mission Leader), Ms María Elena Canedo (Organizations, Training, Gender and Indigenous Communities' Specialist) and Mr Hans Nüsselder (Rural Financial Services Specialist). Mr Paolo Silveri, IFAD Senior Evaluation Officer, joined the evaluation mission in its last week in the field.

2/ Transform into "citizens".

3/ See main text for further details.